The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Financial.Velociraptor on April 05, 2018, 06:11:06 PM
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I was just looking at the S&P futures for tomorrow's open and watched them go from neutral to 1.3% down on implied open. Sure enough, breaking news bar on CNN notes Trumpy is tweeting about another 100B in Chinese tariffs. How did he get an MBA if he failed economics?!?
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BTFD (buy the fucking dip)
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BTFD (buy the fucking dip)
...or...
Top is in!!
:-D
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1.3% is a cliff? News to me.
I was hoping for 13%, my wife's 401(k) contributions will settle tomorrow.
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I was just looking at the S&P futures for tomorrow's open and watched them go from neutral to 1.3% down on implied open. Sure enough, breaking news bar on CNN notes Trumpy is tweeting about another 100B in Chinese tariffs. How did he get an MBA if he failed economics?!?
Trump doesn't have an MBA.
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I just bought some VTSAX, we'll see!
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I wish he had a Wharton MBA instead of pretending to have one.
In light of China's unfair [sic] retaliation...
That's what a trade war is. You tariff this, they tariff that, repeat until the economy is in the shitter.
SPX at -1.44%; NQ at -1.67%.
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Sell covered calls, out of the money.
Write out of the money puts.
Rinse and repeat.
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Hahaha. 1.3% down is a cliff??? What's 20%??? Falling off the face of the earth??
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https://www.youtube.com/watch?v=jTmXHvGZiSY
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Hahaha. 1.3% down is a cliff??? What's 20%??? Falling off the face of the earth??
Yes, 1.3% in the futures market is a big deal, as it is a derivative of the real market opening. So, if the futures are down 1.3% (about 375 DOW points), then you can expect the opening to be down about 500 points, depending what happens overnight in Asia and Europe.
The market won't drop 20% overnight, not even in 2008. But if it did, it would be a huge negative event.
Personally, I can sleep well knowing that my covered calls will expire tomorrow out of the money. Not nearly enough to make up for the beating I'm taking in the long position, but, well, every bit helps.
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what an idiot :(
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I presume most of us are part owners of many large American companies. which is exactly who benefits most from many of these tariffs.
It may be a bumpy ride to get to better Trade Agreements, but this American believes it will be well worth it once its done!
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I presume most of us are part owners of many large American companies. which is exactly who benefits most from many of these tariffs.
It may be a bumpy ride to get to better Trade Agreements, but this American believes it will be well worth it once its done!
Lulz. Worked out well for Smoot and Hawley.
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I presume most of us are part owners of many large American companies. which is exactly who benefits most from many of these tariffs.
It may be a bumpy ride to get to better Trade Agreements, but this American believes it will be well worth it once its done!
Tariffs benefit a select group of industries, usually at the expense of consumers who would otherwise get their goods from somewhere less expensive. If it's a raw materials industry, every other business that requires those materials has to pay more for whatever it is they produce. Which ones do you think are benefiting here, and why should I pay more to support them?
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I presume most of us are part owners of many large American companies. which is exactly who benefits most from many of these tariffs.
It may be a bumpy ride to get to better Trade Agreements, but this American believes it will be well worth it once its done!
Lulz. Worked out well for Smoot and Hawley.
We had a ginormous trade SURPLUS in the Smoot and Hawley days...quite the difference from today!
P.S. remember these are still much more 'threats' than actual 'tariffs' so far. While I would not be surprised to see tariffs enforced, I bet they serve their purpose in a successful renegotiation of brutally unfair Trade Agreements.
P.S.S. Bueller?
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I presume most of us are part owners of many large American companies. which is exactly who benefits most from many of these tariffs.
It may be a bumpy ride to get to better Trade Agreements, but this American believes it will be well worth it once its done!
Tariffs benefit a select group of industries, usually at the expense of consumers who would otherwise get their goods from somewhere less expensive. If it's a raw materials industry, every other business that requires those materials has to pay more for whatever it is they produce. Which ones do you think are benefiting here, and why should I pay more to support them?
You shouldn't pay more to support them.
You should buy a similar product that was made in America or with our dozens of trade partners that practice fair trades. I.e. their products aren't priced based on stolen IP, child slave labor, etc and putting companies that do Play Fair out of business. If you have to pay $60 more for your next TV I'm cool with it.
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I presume most of us are part owners of many large American companies. which is exactly who benefits most from many of these tariffs.
It may be a bumpy ride to get to better Trade Agreements, but this American believes it will be well worth it once its done!
Lulz. Worked out well for Smoot and Hawley.
We had a ginormous trade SURPLUS in the Smoot and Hawley days...quite the difference from today!
P.S. remember these are still much more 'threats' than actual 'tariffs' so far. While I would not be surprised to see tariffs enforced, I bet they serve their purpose in a successful renegotiation of brutally unfair Trade Agreements.
P.S.S. Bueller?
Should the 138 countries that we still have a trade SURPLUS with announce tariffs against our exports? Fair is fair, right? Let's do away with the entire global trade system. What's the worst that can happen?
Good on ya for the Bueller reference though.
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Analyzing tariffs in the abstract isn’t all that relevant to what’s happening now, which is a trade showdown with China.
China. Which can easily out-tariff us, for the simple fact that their economy isn’t as acclimated to our imports as we are to theirs.
China. Which sells more stuff to us than we sell to them. They could literally match all our tariffs with comparable tariffs, and still run a trade surplus.
China. Which holds almost 1.25 trillion dollars in U.S. debt.
Yeah...all politics aside: getting into a trade war with China is a stupid, stupid idea.
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I presume most of us are part owners of many large American companies. which is exactly who benefits most from many of these tariffs.
It may be a bumpy ride to get to better Trade Agreements, but this American believes it will be well worth it once its done!
Tariffs benefit a select group of industries, usually at the expense of consumers who would otherwise get their goods from somewhere less expensive. If it's a raw materials industry, every other business that requires those materials has to pay more for whatever it is they produce. Which ones do you think are benefiting here, and why should I pay more to support them?
You shouldn't pay more to support them.
You should buy a similar product that was made in America or with our dozens of trade partners that practice fair trades. I.e. their products aren't priced based on stolen IP, child slave labor, etc and putting companies that do Play Fair out of business. If you have to pay $60 more for your next TV I'm cool with it.
Are there a lot of steel mills and aluminum mines operated by child labor in China? You didn't answer the other question. Who in the US is benefiting? Name a US company that will profit from this, and I'll name ten US companies that will have increased costs.
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China. Which sells more stuff to us than we sell to them. They could literally match all our tariffs with comparable tariffs, and still run a trade surplus.
Wait I don't think I follow you here.
The problem China has in a trade war with us is exactly that we don't sell nearly as much to them as they do to us. If they try to put tariffs on equal dollar values of our exports as Trump puts on their exports, they're going to run out of US exports to tax a long time before Trump runs out of chinese exports to tax.
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China. Which sells more stuff to us than we sell to them. They could literally match all our tariffs with comparable tariffs, and still run a trade surplus.
Wait I don't think I follow you here.
The problem China has in a trade war with us is exactly that we don't sell nearly as much to them as they do to us. If they try to put tariffs on equal dollar values of our exports as Trump puts on their exports, they're going to run out of US exports to tax a long time before Trump runs out of chinese exports to tax.
Good point.
There was a good (albeit hypothetical) synopsis of which country could better weather a trade war (link (https://www.washingtonpost.com/news/wonk/wp/2018/04/05/china-has-more-to-lose-in-a-trade-war-but-trump-has-a-key-weakness/?utm_term=.65f208d5dc3f)).
Summary:
US: has less to lose economically as Chinese exports total $130B (vs $506B from China to US)
China: Politically China's communist structure (and Xi's lack of term limits) means Xi can play the long game - Xi won't face political pressure from congress or constituents. They have more cash on hand ($3T) they can deploy to keep citizens from feeling any effects (something the WH can't do).
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I was just looking at the S&P futures for tomorrow's open and watched them go from neutral to 1.3% down on implied open. Sure enough, breaking news bar on CNN notes Trumpy is tweeting about another 100B in Chinese tariffs. How did he get an MBA if he failed economics?!?
Honestly I thought everyone realised that tariffs destroy your economy. Say you put a tariff on steel that increases the price of steel from $1 a pound to $2 a pound. The guy who buys steel now has to pass on his costs to the next person and round the circle we go. Eventually it permeates everywhere and every thing is more expensive. It's pretty stupid.
I'm not even a Trump hater. Prior to these stupid protectionist policies being implemented I thought he would be smart enough to talk nonsense but not actually do it. The guy has proven me wrong.
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*yawn*
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I'm surprised how many experts we have on global economics here.
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I'm surprised how many experts we have on global economics here.
It's the internet. Everyone gets to be an expert. Kind of like cable news.
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China. Which sells more stuff to us than we sell to them. They could literally match all our tariffs with comparable tariffs, and still run a trade surplus.
Wait I don't think I follow you here.
The problem China has in a trade war with us is exactly that we don't sell nearly as much to them as they do to us. If they try to put tariffs on equal dollar values of our exports as Trump puts on their exports, they're going to run out of US exports to tax a long time before Trump runs out of chinese exports to tax.
What’s going on now is a game of equivalence. We impose X amount of tariffs, they impose X amount. If that escalated to the point that all U.S. trade to China was under tariff, three factors would be in place:
1.) Proportionally, the damage to their economy would be less than to ours.
2.) Since the penetration of U.S. products into China is far shallower than vice versa, the tariffs would serve as acceleration for replacement of those product sectors with Chinese manufacturing, a process already well underway.
3.) The internal pressure of foreign tariffs would be severely straining the U.S. economy. Tariffs on imported goods have the effect of raising prices on non-imported goods, since domestic manufacturers no longer have to be competitive against the pre-tariff price of imports, only the post-tariff price. If your Chinese competitor now has to charge 20% more than you do (to pay for the tariffs), you can get away with a 19% price increase. Not being a free-market capitalist country, China has powerful internal price controls to keep this from happening on their end.
If the trade war went beyond the skirmishes of tariff equivalence and into the territory of unequal sanction? Yes, the US would have more to throw on the fire, but the American economy would be profoundly damaged, if not sunk, long before then. Contrary to the president, this isn’t “easy to win.”
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I'm surprised how many experts we have on global economics here.
Me too. Good reads though sometimes
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China. Which sells more stuff to us than we sell to them. They could literally match all our tariffs with comparable tariffs, and still run a trade surplus.
Wait I don't think I follow you here.
The problem China has in a trade war with us is exactly that we don't sell nearly as much to them as they do to us. If they try to put tariffs on equal dollar values of our exports as Trump puts on their exports, they're going to run out of US exports to tax a long time before Trump runs out of chinese exports to tax.
What’s going on now is a game of equivalence. We impose X amount of tariffs, they impose X amount. If that escalated to the point that all U.S. trade to China was under tariff, three factors would be in place:
1.) Proportionally, the damage to their economy would be less than to ours.
2.) Since the penetration of U.S. products into China is far shallower than vice versa, the tariffs would serve as acceleration for replacement of those product sectors with Chinese manufacturing, a process already well underway.
3.) The internal pressure of foreign tariffs would be severely straining the U.S. economy. Tariffs on imported goods have the effect of raising prices on non-imported goods, since domestic manufacturers no longer have to be competitive against the pre-tariff price of imports, only the post-tariff price. If your Chinese competitor now has to charge 20% more than you do (to pay for the tariffs), you can get away with a 19% price increase. Not being a free-market capitalist country, China has powerful internal price controls to keep this from happening on their end.
If the trade war went beyond the skirmishes of tariff equivalence and into the territory of unequal sanction? Yes, the US would have more to throw on the fire, but the American economy would be profoundly damaged, if not sunk, long before then. Contrary to the president, this isn’t “easy to win.”
Yes, and I'm sure there are one or two people who've warned Trump of these and other serious consequences, but it's far too much for his attention span. He sees a trade deficit like a dog sees a squirrel. He'll run himself and the entire global economy into oncoming traffic if he has to, but in fact, I'm fairly certain he won't even catch the squirrel. Any bets against our trade deficit with China actually being higher this time next year despite (or because of) the bluster and stupidity flowing from the moron in the White House?
If we wanted to thumb our nose at China and increase our exports at the same time, the TPP was an excellent way to do that. China was pretty upset about being excluded. But like a lot of smart policy, it suffered in the US from a populist uprising in a post-fact era, and not at all from poor negotiating on the part of the US representatives.
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What’s going on now is a game of equivalence. We impose X amount of tariffs, they impose X amount. If that escalated to the point that all U.S. trade to China was under tariff, three factors would be in place:
1.) Proportionally, the damage to their economy would be less than to ours.
2.) Since the penetration of U.S. products into China is far shallower than vice versa, the tariffs would serve as acceleration for replacement of those product sectors with Chinese manufacturing, a process already well underway.
3.) The internal pressure of foreign tariffs would be severely straining the U.S. economy. Tariffs on imported goods have the effect of raising prices on non-imported goods, since domestic manufacturers no longer have to be competitive against the pre-tariff price of imports, only the post-tariff price. If your Chinese competitor now has to charge 20% more than you do (to pay for the tariffs), you can get away with a 19% price increase. Not being a free-market capitalist country, China has powerful internal price controls to keep this from happening on their end.
If the trade war went beyond the skirmishes of tariff equivalence and into the territory of unequal sanction? Yes, the US would have more to throw on the fire, but the American economy would be profoundly damaged, if not sunk, long before then. Contrary to the president, this isn’t “easy to win.”
What's the argument for #1? Assuming a tariff is equally damaging to the exporting and importing country (or actually even if the damage is unequal as long as China and the USA are imposing tariffs on the same number of goods), the damage to each economy would be equal in both countries, and since the US's economy is still larger than that of China, the damage would be proportionately smaller.
#2 seems reasonable although I'd predict we'd see similar effects in the USA with an acceleration of the current trend towards investments in domestic (largely robotic) manufacturing to replace imported goods.
For #3, that model only works if you assume there is only one domestic manufacturer. If you have multiple domestic manufacturers competition is going to prevent the price from rising rapidly. It also assumes the chinese manufacturer doesn't have any capacity to cut pre-tariff prices to remain cost competitive with domestic manufacturers while still paying the tariff.
Note that none of the above should be read as endorsing Trump's strategy (if it is a strategy) or trying to argue a trade war isn't going to really suck for everyone involved.
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What's the argument for #1? Assuming a tariff is equally damaging to the exporting and importing country (or actually even if the damage is unequal as long as China and the USA are imposing tariffs on the same number of goods), the damage to each economy would be equal in both countries, and since the US's economy is still larger than that of China, the damage would be proportionately smaller.
Yes, I should have clarified that. What I meant can be illustrated by two statistics. Here are the top 10 categories of imports from China to the US:
1. Electronic equipment: $150 billion
2. Machinery: $112.4 billion
3. Furniture, lighting, signs: $34.8 billion
4. Toys, games: $26.7 billion
5. Plastics: $17.6 billion
6. Vehicles: $15.6 billion
7. Knit or crochet clothing: $14.9 billion
8. Footwear: $14.8 billion
9. Clothing (not knit or crochet): $13.5 billion
10. Iron or steel products: $12.4 billion
Now, here are the top 10 categories of imports from the US to China:
1. Soybeans: $15 billion
2. Civilian aircraft: $8.4 billion
3. Cotton: $3.4 billion
4. Copper materials: $3 billion
5. Passenger vehicles (small engines): $3 billion
6. Aluminum materials: $2.4 billion
7. Passenger vehicles (large engines): $2.2 billion
8. Electronic integrated circuits: $1.7 billion
9. Corn: $1.3 billion
10. Coal: $1.2 billion
See the difference? Most of what we get from them are finished goods. Most of what they get from us are commodities.
It’s easier to switch to another supplier for commodities, especially if that commodity can be swapped out for another. Soybeans, for instance, which they already plan to tariff (yes, the Chinese went directly after our #1 export in retaliation for Trump’s tariff on their #10 export). Not only can they get soybeans elsewhere, they can replace it with other, cheaper food sources if need be. The populace might grumble, but they won’t starve.
On the other hand, their exports are woven into several points of our economy. If Trump decides to go after their #1 export to us, electronic equipment, he’s not only attacking them but the US companies that design the equipment (hardware companies), make it function (software companies), create demand (marketing, media) and physically sell it (retail). That’s a lot more disruptive and damaging than finding an alternative to soybeans.
For #3, that model only works if you assume there is only one domestic manufacturer. If you have multiple domestic manufacturers competition is going to prevent the price from rising rapidly.
I wish! Unfortunately, since there’s now a set point, a clear price threshold that cuts off the Chinese competitors, everyone tends to migrate to the vicinity of that set point. “Competition” becomes a matter of shaving off a point or two from that, rather than being a direct response to the marketplace.
It also assumes the chinese manufacturer doesn't have any capacity to cut pre-tariff prices to remain cost competitive with domestic manufacturers while still paying the tariff.
Of course. But that defeats the supposed purpose of the tariff, which is to make it no longer worthwhile to pursue US markets, thereby helping US companies by scaring off their competition. If the US government isn’t willing to ratchet up the tariff until that’s achieved, you’ve simply created a leaner, hungrier competitor. Which will be an even more unpleasant prospect if and when those tariffs go away.
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I'm surprised how many experts we have on global economics here.
For 10 mustache hairs, name this person.
For 20 hairs, name his plan... the ___ Plan.
For 50 mustache hairs, post his infamous quote.
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I'm surprised how many experts we have on global economics here.
For 10 mustache hairs, name this person.
For 20 hairs, name his plan... the ___ Plan.
For 50 mustache hairs, post his infamous quote.
First is pretty easy.
Second is too easy if you know the first.
Third I'm guessing is "everything will work out alright" which I just learned from Wikipedia; talk about being wrong on an epic scale. According to his Wiki page there's another fun quote attributed to him later on, so maybe you mean that instead.
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Was the infamous quote 'Remember son you're a Melon'?
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I'm surprised how many experts we have on global economics here.
For 10 mustache hairs, name this person.
For 20 hairs, name his plan... the ___ Plan.
For 50 mustache hairs, post his infamous quote.
Yeah, I’m wondering if you mean “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system.“
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I'm surprised how many experts we have on global economics here.
If you studied economics in any way shape or form you'd realise that protectionist policies don't work. It's not complex at all.
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No new tariffs have been implemented.
They've been brought up as he's trying to negotiate a better deal. That's a good thing. We should try to get a better deal. Our last president didn't do anything other than his disastrous Trade agreement. First step is to squeeze the toothpaste and see what comes out. Worst case is he backs down back to where we were, best case is we get a better situation on trade. I think China will be willing to negotiate to an extent. We'll see. Short term will hurt as the market isn't sure what will come of it. Trump says a lot of things which never materialize, all that matters is what actually gets done, like the tax cuts which we all benefited from. For now, let's see how this plays out.
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No new tariffs have been implemented.
They've been brought up as he's trying to negotiate a better deal. That's a good thing. We should try to get a better deal. Our last president didn't do anything other than his disastrous Trade agreement. First step is to squeeze the toothpaste and see what comes out. Worst case is he backs down back to where we were, best case is we get a better situation on trade. I think China will be willing to negotiate to an extent. We'll see. Short term will hurt as the market isn't sure what will come of it. Trump says a lot of things which never materialize, all that matters is what actually gets done, like the tax cuts which we all benefited from. For now, let's see how this plays out.
I don't buy this 'ends justify the means' crap. Problem here is that the markets aren't just some abstract thing - it's real value that could seriously screw with people's lives. If there's a sustained drop companies stop hiring, panic and protection sets in and we go into recession mode.
That's why past presidents (Ds & Rs alike) haven't gone down this route. Nobody wins in a trade war, or even trade postering... your best hope is that you come out of it with fewer scrapes than the other guy. It's not a zero-sum game.
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Short term market fluctuations matter very little. All we're seeing is some jitters short term.
We've been in a trade war with China for a long time, not even mentioning the IP issues - now we're finally trying to do something about it.
I really dislike a lot of what Trump does. But I think he's actually right on China.
The Amazon thing, on the other hand, is a circus.
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Suppose that as a result of future tariffs buyers select their second favorite suppliers, resulting in 15-20% price increases on certain items.
Apart from the China specificness, can someone explain the difference between the proposed tarrifs and the EU's value added tax of the same magnitude? Isn't this nothing more than a pretty insignificant sales tax?
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No new tariffs have been implemented.
They've been brought up as he's trying to negotiate a better deal. That's a good thing. We should try to get a better deal. Our last president didn't do anything other than his disastrous Trade agreement. First step is to squeeze the toothpaste and see what comes out. Worst case is he backs down back to where we were, best case is we get a better situation on trade. I think China will be willing to negotiate to an extent. We'll see. Short term will hurt as the market isn't sure what will come of it. Trump says a lot of things which never materialize, all that matters is what actually gets done, like the tax cuts which we all benefited from. For now, let's see how this plays out.
bro, you either didn't read the tax plan or have just had your head in the sand. LOTS of people did NOT benefit from the tax plan. my taxes stayed exactly where they were, I didn't get a cut or an increase, however if the personal tax cuts expire then mine will go up from where they used to be. almost all the benefits go to those making >500k/year. The standard deduction doubled, that's great, however they took away personal exemptions. Giving most people a quarter while the top 1% takes home hundred dollar bills does not mean "everyone benefits". wealth inequality in this country is at a historic level and this bill did nothing but worsen it. You can only concentrate so much of the wealth into so few hands, at some point the system fails. When 50% of the country has zero savings and nearly all retirees are completely dependent on their meager SS checks, you have a problem. I am a high earner closer to FI in my early 30s however I can see that even if you take care of yourself/adequately save if the rest of society is broke your life is not going to be that great.
Anyhow, the tax cuts did a huge disservice to our future. This will be evident by the increased inflation/national debt coupled w/ stagnant wage growth and an ever increasing wealth inequality.
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No new tariffs have been implemented.
They've been brought up as he's trying to negotiate a better deal. That's a good thing. We should try to get a better deal. Our last president didn't do anything other than his disastrous Trade agreement. First step is to squeeze the toothpaste and see what comes out. Worst case is he backs down back to where we were, best case is we get a better situation on trade. I think China will be willing to negotiate to an extent. We'll see. Short term will hurt as the market isn't sure what will come of it. Trump says a lot of things which never materialize, all that matters is what actually gets done, like the tax cuts which we all benefited from. For now, let's see how this plays out.
bro, you either didn't read the tax plan or have just had your head in the sand. LOTS of people did NOT benefit from the tax plan. my taxes stayed exactly where they were, I didn't get a cut or an increase, however if the personal tax cuts expire then mine will go up from where they used to be. almost all the benefits go to those making >500k/year. The standard deduction doubled, that's great, however they took away personal exemptions. Giving most people a quarter while the top 1% takes home hundred dollar bills does not mean "everyone benefits". wealth inequality in this country is at a historic level and this bill did nothing but worsen it. You can only concentrate so much of the wealth into so few hands, at some point the system fails. When 50% of the country has zero savings and nearly all retirees are completely dependent on their meager SS checks, you have a problem. I am a high earner closer to FI in my early 30s however I can see that even if you take care of yourself/adequately save if the rest of society is broke your life is not going to be that great.
Anyhow, the tax cuts did a huge disservice to our future. This will be evident by the increased inflation/national debt coupled w/ stagnant wage growth and an ever increasing wealth inequality.
I'm among those who's tax burden will not go down this year, and I'm young enough that the loss of federal revenue (and the resulting increase in the deficit) is seriously starting to worry me. I suppose one could argue that I benefited as stock prices took off, but that's the counter argument to not being concerned about gyrations to the market due to this tariff talk. Most of my peers - younger people who are in or have just finished graduate school - have no savings and low incomes, so they are pretty much in the same spot. Despite all the increases in corporate profits wage increases haven't gone up as some predicted - instead most companies have used their savings to issue dividends and stock buy-backs. Such is the incentive structure for publicly traded companies - I really can't blame them.
Still, I strongly disagree that 'worst case we back down and are back where we started' - though it is possible a deal could be worked out prior and few will remember this two years from now (best possible outcome IMO). Another potential outcome is that these and other tariffs go into effect, the EU, Brazil & India are forced to slap on their own and we wind up with curtailed global trade. A moderate recession hits and unemployment goes up to 8%. That's 6.5 million people who lose their income.
Problem is, that's not even a 'worst case' scenario, but something about in the middle of what's predicted should this escalate.
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Still, I strongly disagree that 'worst case we back down and are back where we started' - though it is possible a deal could be worked out prior and few will remember this two years from now (best possible outcome IMO). Another potential outcome is that these and other tariffs go into effect, the EU, Brazil & India are forced to slap on their own and we wind up with curtailed global trade. A moderate recession hits and unemployment goes up to 8%. That's 6.5 million people who lose their income.
Problem is, that's not even a 'worst case' scenario, but something about in the middle of what's predicted should this escalate.
Do you see a subsequent deflationary pressure on housing, consumer goods, etc?
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all that matters is what actually gets done, like the tax cuts which we all benefited from. For now, let's see how this plays out.
Yes, the tax cuts benefited most people in multiple ways.
As a upper middle class worker, not only did my paycheck go up significantly from the tax cut, but the stock market has done better, including the time period in which the tax cuts were largely anticipated. Many people got pay raises and bonuses, and it's effectively a stimulus to the economy.
I'm concerned about the possible trade war, but I'm not panicking.
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Exactly. The corporate tax cuts in particular were needed, and yes we've all benefited from it either directly or indirectly.
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Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
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Exactly. The corporate tax cuts in particular were needed, and yes we've all benefited from it either directly or indirectly.
I have a big concern that this indirect 'benefit' will wind up costing me far more in the long term. We punched a much bigger hole in the deficit, and as the saying goes, there's no free lunch. I'm deeply skeptical that this will be a net positive for the majority of Americans. Trickle-down economics didn't work in the 1980s, I don't see why it will now.
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Exactly. The corporate tax cuts in particular were needed, and yes we've all benefited from it either directly or indirectly.
I have a big concern that this indirect 'benefit' will wind up costing me far more in the long term. We punched a much bigger hole in the deficit, and as the saying goes, there's no free lunch. I'm deeply skeptical that this will be a net positive for the majority of Americans. Trickle-down economics didn't work in the 1980s, I don't see why it will now.
Exact opposite. Has nothing to do with trickle down, everything to do with the US being more competitive internationally. We were near the top in terms of corporate tax rate. China, on the other hand, has an effective corporate tax rate of 15% in tech, we need to be able to compete with that particularly as the AI revolution is on the horizon, where being first will be critical. Cutting corporate taxes was a good long term move.
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Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
Don't want to derail this thread, happy to PM about it if you'd like. In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.
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Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
Don't want to derail this thread, happy to PM about it if you'd like. In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.
NAFTA was signed into law by Bill Clinton in 1994. Obama wasn't even an Illinois state senator yet.
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Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
Don't want to derail this thread, happy to PM about it if you'd like. In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.
NAFTA was signed into law by Bill Clinton in 1994. Obama wasn't even an Illinois state senator yet.
Correct. Obama renegotiated it.
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Exactly. The corporate tax cuts in particular were needed, and yes we've all benefited from it either directly or indirectly.
I have a big concern that this indirect 'benefit' will wind up costing me far more in the long term. We punched a much bigger hole in the deficit, and as the saying goes, there's no free lunch. I'm deeply skeptical that this will be a net positive for the majority of Americans. Trickle-down economics didn't work in the 1980s, I don't see why it will now.
Exact opposite. Has nothing to do with trickle down, everything to do with the US being more competitive internationally. We were near the top in terms of corporate tax rate. China, on the other hand, has an effective corporate tax rate of 15% in tech, we need to be able to compete with that particularly as the AI revolution is on the horizon, where being first will be critical. Cutting corporate taxes was a good long term move.
This is not the view that I see. There's the changes to the corporate tax rates which happened in conjunction with the changes to the individual tax rates. The latter certainly benefited the affluent disproportionately. That's trickle-down economics any way you slice it. The corporate tax rate changes are a different matter; certainly we had very high top rates, but for most corporations that wasn't the same as the effective tax rate. Regardless, one of the public rationales of this tax plan (and continues to be a 'selling point') is that a reduction in the corporate tax rate will lead to higher employee wages. Again, trickle-down. Instead a lot of companies issued or increased their dividends and started stock-buy backs. We haven't seen the jump in employee wages.
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Wage increases have been increasing, more than they have in 18 years according to the national association of business economics. However, we've only had a few months since the tax decreases, so it'll take awhile to really see the benefit there. Unemployment rate is lower than it's been in a long time, and that will likely drive up wage increases since companies will need to compete more for talent.
But more important than wage increases is simply ensuring our businesses have the cash needed to compete on a global scale, particularly long term.
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Wage increases have been increasing, more than they have in 18 years according to the national association of business economics. However, we've only had a few months since the tax decreases, so it'll take awhile to really see the benefit there. Unemployment rate is lower than it's been in a long time, and that will likely drive up wage increases since companies will need to compete more for talent.
But more important than wage increases is simply ensuring our businesses have the cash needed to compete on a global scale, particularly long term.
You and I must be looking at different data. Agreed that it's only been a short time, but if we're expecting wages to increase after giving tax cuts to corporations, that's still trickly-down policy. Feel free to link yours.
FWIW - https://www.bls.gov/opub/ted/2018/real-average-hourly-earnings-increased-0-8-percent-from-january-2017-to-january-2018.htm (https://www.bls.gov/opub/ted/2018/real-average-hourly-earnings-increased-0-8-percent-from-january-2017-to-january-2018.htm)
Wage growth since 1998 https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx?panel=1 (https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx?panel=1)
I'm all for our companies competing on a global scale, but given the size and capitol of our largest companies it seems that i) we were already competing very well on a global scale and ii) starting tit-for-tat tariffs immediately after lowering the corporate tax rate seems to counter any 'gains' companies may have with a reduced taxable burden with limiting their competitiveness in oversees markets.
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You and I must be looking at different data.
https://www.marketwatch.com/story/wage-increases-reported-by-highest-number-of-companies-in-18-years-survey-finds-2018-01-29
Yes, expecting wage increases is a form of trickle down theory. I don't see that as the real benefit of the tax decreases or the primary goal of it.
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You and I must be looking at different data.
https://www.marketwatch.com/story/wage-increases-reported-by-highest-number-of-companies-in-18-years-survey-finds-2018-01-29
Yes, expecting wage increases is a form of trickle down theory. I don't see that as the real benefit of the tax decreases or the primary goal of it.
yeah, I'm not sure that article supports your claim. From the article you linked:
Wage growth has been the missing ingredient to the recovery from the Great Recession. But despite optimism in surveys, and anecdotes, official data continue to point to pretty lackluster wage growth.
Average hourly earnings on a 12-month basis hasn’t surpassed 3% growth since the recession.
(emphasis added).
There's a pretty clear graph in there too showing how wage growth was higher before the great recession.
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Not wage %, but the percentage of companies which are increasing wages. Again, we are only 3 months into the cycle anyway, so this is pretty statistically insignificant.
"The National Association for Business Economics said the net percentage of those companies which have increased wages and salaries over the last three months rose to 48 in January, up from 37 in October and the third-highest reading since April 1982."
Again, this isn't the primary benefit or goal of the corporate deductions in my view.
The primary benefit to me is that companies will be more globally competitive with more cash to invest and build larger work forces and hire better employees. The competition for global talent will be heating up dramatically in the future. Let's give our companies all the edge they can get to compete and hold onto this talent instead of handicapping them by taxing them at high rates so that our inefficient government can then squander that money away.
My own business, while small, has been able to hire 10 new employees this year due to the new tax rate. While thats a drop in the bucket, hopefully there will be thousands of other examples like mine.
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Not wage %, but the percentage of companies which are increasing wages. Again, we are only 3 months into the cycle anyway, so this is pretty statistically insignificant.
"The National Association for Business Economics said the net percentage of those companies which have increased wages and salaries over the last three months rose to 48 in January, up from 37 in October and the third-highest reading since April 1982."
Again, this isn't the primary benefit or goal of the corporate deductions in my view.
ok, I see what you are saying.
From the press statements and media coverage I heard, the GOP was pushing the tax bill of a way of 1) reducing the taxes of almost everyone immediately, ii) savings by corporations would result in better wages and C) its necessary for sustained economic growth (this gets into global competitiveness, lowering employment, blah blah blah).
You certainly have a different take on how it was presented, and no doubt that could just be from us following different news sources.
In the end we're left with we'll have to wait and see. But specifically to your earlier comment I certainly don't see any direct (dollars in my pocket) benefit right now, and I am fearful that it will be a net negative in the years ahead. I could be wrong. In fact I hope I'm wrong, because I'd rather be wrong and wealthier than right and poorer.
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My own business, while small, has been able to hire 10 new employees this year due to the new tax rate. While thats a drop in the bucket, hopefully there will be thousands of other examples like mine.
It is very hard to believe that 10 new employees are a result of the tax rate. Increased business, sure. Tax rate? Not convinced.
FWIW, I might have to lay off three or four employees if the trade war does happen.
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My own business, while small, has been able to hire 10 new employees this year due to the new tax rate. While thats a drop in the bucket, hopefully there will be thousands of other examples like mine.
It is very hard to believe that 10 new employees are a result of the tax rate. Increased business, sure. Tax rate? Not convinced.
Was most definitely the tax rate.
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Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
Don't want to derail this thread, happy to PM about it if you'd like. In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.
NAFTA was signed into law by Bill Clinton in 1994. Obama wasn't even an Illinois state senator yet.
Correct. Obama renegotiated it.
Nope. This is totally false. Not sure where you got that info. The TPP was negotiated under Obama, but fell victim to our fact free political environment. IMO, it would have been the gold standard for trade deals had it gone through.
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IMO, it would have been the gold standard for trade deals had it gone through.
Your opinion?
You must be Michael Camunez. What was it like being the Assistant Secretary of Commerce?
"TPP is the ‘gold standard’ for the modern free trade agreement," says Michael Camunez, president of Monarch Global Strategies in Washington and former U.S. Assistant Secretary of Commerce under Obama.
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IMO, it would have been the gold standard for trade deals had it gone through.
Your opinion?
You must be Michael Camunez.
"TPP is the ‘gold standard’ for the modern free trade agreement," says Michael Camunez, president of Monarch Global Strategies in Washington and former U.S. Assistant Secretary of Commerce under Obama.
Ok, so we can agree that Obama did not sign into law or negotiate NAFTA. Good. It's impossible to debate something if you don't have the most basic of facts straight.
I'm not Michael Camunez, but I think I did read that article back when it was published. So he and I share an opinion, his likely more informed than mine, and at least we can tell the difference between fact and fiction.
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
As if you (or Trump, for that matter) know anything about TPP other than it was an Obama initiative and therefore must be bad. I'll make sure to cross reference my opinions against your Google searches next time to make sure they don't match anyone else's out there.
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
The TPP ≠ NAFTA. In many ways the TPP used NAFTA as a blueprint, and had the US ratified the TPP it would have superceded NAFTA and included agreements with a bunch more countries. But deciding not to participate in the TPP didn't negate NAFTA either.
FWIW, the term "gold standard" is extremely common as to be the default term anytime someone considers a policy to be the best one out there. I don't see why it would be embarrassing to use the same language as Camunez to describe strong support.
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
You're kidding right? They're separate trade agreements. One involved just North America and the other involves most of the countries that touch the Pacific Ocean. It's right there in their names.
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
You're kidding right? They're separate trade agreements. One involved just North America and the other involves most of the countries that touch the Pacific Ocean. It's right there in their names.
Not at all. Read up on it. It's absolutely a renegotiation of NAFTA.
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It absoutley wasn’t. Maybe turn ff the fox news once in a while.
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It absoutley wasn’t. Maybe turn ff the fox news once in a while.
Don't think I've ever watched FOX, but nice Ad Hominem.
But since we're already quoting Camunez, may as well stay in the theme of the Forbes article.
https://www.forbes.com/sites/kenrapoza/2017/08/14/nafta-will-live-another-day-and-be-based-on-obamas-tpp/#518c8c596016
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But since we're already quoting Camunez, may as well stay in the theme of the Forbes article.
https://www.forbes.com/sites/kenrapoza/2017/08/14/nafta-will-live-another-day-and-be-based-on-obamas-tpp/#518c8c596016
forbes.com/sites/<anything> is not a "Forbes article." It's a blog site that basically anyone with journalistic tendencies can sign up for, more similar to wordpress.com than an actual newspaper or magazine. Except a lot of whackadoodles like to use Forbes Sites because having "forbes.com" in the URL lends false credibility to their blog.
And he's actually saying the opposite of what you are: that Trump's renegotiated NAFTA will probably end up being better than the current NAFTA because it will borrow from the superior TPP trade agreement.
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But since we're already quoting Camunez, may as well stay in the theme of the Forbes article.
https://www.forbes.com/sites/kenrapoza/2017/08/14/nafta-will-live-another-day-and-be-based-on-obamas-tpp/#518c8c596016
forbes.com/sites/<anything> is not a "Forbes article." It's a blog site that basically anyone with journalistic tendencies can sign up for, more similar to wordpress.com than an actual newspaper or magazine. Except a lot of whackadoodles like to use Forbes Sites because having "forbes.com" in the URL lends false credibility to their blog.
And he's actually saying the opposite of what you are: that Trump's renegotiated NAFTA will probably end up being better than the current NAFTA because it will borrow from the superior TPP trade agreement.
Okay, I admit I didn't know that about Forbes. Interesting.
Well, let's try this one from Canada.
https://globalnews.ca/news/3377323/tpp-was-obamas-renegotiation-of-nafta-former-trade-envoy/
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
You're kidding right? They're separate trade agreements. One involved just North America and the other involves most of the countries that touch the Pacific Ocean. It's right there in their names.
Not at all. Read up on it. It's absolutely a renegotiation of NAFTA.
How the hell can you "renegotiate" a trade agreement with 10 other countries which weren't in NAFTA in the first place?
It would be more accurate (but still ridiculous) to say it was a renegotiation of the TPSEP, which the US wasn't even part of.
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
You're kidding right? They're separate trade agreements. One involved just North America and the other involves most of the countries that touch the Pacific Ocean. It's right there in their names.
Not at all. Read up on it. It's absolutely a renegotiation of NAFTA.
How the hell can you "renegotiate" a trade agreement with 10 other countries which weren't in NAFTA in the first place?
It would be more accurate (but still ridiculous) to say it was a renegotiation of the TPSEP, which the US wasn't even part of.
because it's a modification, rather than a complete scrapping of NAFTA
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TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
You're kidding right? They're separate trade agreements. One involved just North America and the other involves most of the countries that touch the Pacific Ocean. It's right there in their names.
Not at all. Read up on it. It's absolutely a renegotiation of NAFTA.
How the hell can you "renegotiate" a trade agreement with 10 other countries which weren't in NAFTA in the first place?
It would be more accurate (but still ridiculous) to say it was a renegotiation of the TPSEP, which the US wasn't even part of.
because it's a modification, rather than a complete scrapping of NAFTA
A modification? No. A modification is when you ask for mashed potatoes instead of french fries with your hamburger. Here we've swapped out the potato for a salad, the burger for a steak, and oh yeah, now we've switched from Applebee's to Morton's Steakhouse.
Look, I get why pundits want to label the TPP a 'modification' or 'renegotiation' of NAFTA, because then they can pass the baggage of NAFTA on to the TPP by association. But this association doesn't pass even a precursory examination. The TPP involved a dozen countries instead of three. It dealt with trade across 4 continents instead of one. It included countries like Japan, which has a larger economy than Canada and Mexico combined.
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Well, let's try this one from Canada.
https://globalnews.ca/news/3377323/tpp-was-obamas-renegotiation-of-nafta-former-trade-envoy/
Except that still is saying the opposite of what you're saying.
You are saying that Obama "renegotiated" NAFTA (and is therefore to blame for its failings) and that TPP was terrible (and its a good thing Trump killed it). The article is saying that Obama was going to use the TPP to essentially replace NAFTA and would have fixed its failings in that way, and that now that Trump killed it he's having to scramble to try to fix its failings directly. Both articles you've cited have literally said the opposite of what you've claimed.
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Well, let's try this one from Canada.
https://globalnews.ca/news/3377323/tpp-was-obamas-renegotiation-of-nafta-former-trade-envoy/
Except that still is saying the opposite of what you're saying.
You are saying that Obama "renegotiated" NAFTA (and is therefore to blame for its failings) and that TPP was terrible (and its a good thing Trump killed it). The article is saying that Obama was going to use the TPP to essentially replace NAFTA and would have fixed its failings in that way, and that now that Trump killed it he's having to scramble to try to fix its failings directly. Both articles you've cited have literally said the opposite of what you've claimed.
Really not sure what you're reading, Sherry.
Directly from the article:
“TPP, in our view, was the renegotiation of NAFTA,”
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Well, let's try this one from Canada.
https://globalnews.ca/news/3377323/tpp-was-obamas-renegotiation-of-nafta-former-trade-envoy/
Except that still is saying the opposite of what you're saying.
You are saying that Obama "renegotiated" NAFTA (and is therefore to blame for its failings) and that TPP was terrible (and its a good thing Trump killed it). The article is saying that Obama was going to use the TPP to essentially replace NAFTA and would have fixed its failings in that way, and that now that Trump killed it he's having to scramble to try to fix its failings directly. Both articles you've cited have literally said the opposite of what you've claimed.
Really not sure what you're reading, Sherry.
Directly from the article:
“TPP, in our view, was the renegotiation of NAFTA,”
Way to look for a keyword and miss the point.
Michael Froman explained to The West Block‘s Vassy Kapelos that like President Donald Trump, the former administration recognized there were issues within NAFTA. It just had a different way of tackling the problem.
Rather than threatening to scrap the North American agreement, or even re-open it, Barack Obama tried to address those issues via the TPP.
“TPP, in our view, was the renegotiation of NAFTA,” Froman said.
“That’s why [TPP] included binding and enforceable labour and environmental standards. Why it reformed inter-state dispute settlement … gave us access to to dairy and poultry for the first time in Canada, and energy in Mexico [and] dealt with new issues like the digital economy and state-owned enterprises.”
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Well, let's try this one from Canada.
https://globalnews.ca/news/3377323/tpp-was-obamas-renegotiation-of-nafta-former-trade-envoy/
Except that still is saying the opposite of what you're saying.
You are saying that Obama "renegotiated" NAFTA (and is therefore to blame for its failings) and that TPP was terrible (and its a good thing Trump killed it). The article is saying that Obama was going to use the TPP to essentially replace NAFTA and would have fixed its failings in that way, and that now that Trump killed it he's having to scramble to try to fix its failings directly. Both articles you've cited have literally said the opposite of what you've claimed.
Really not sure what you're reading, Sherry.
Directly from the article:
“TPP, in our view, was the renegotiation of NAFTA,”
Way to look for a keyword and miss the point.
Michael Froman explained to The West Block‘s Vassy Kapelos that like President Donald Trump, the former administration recognized there were issues within NAFTA. It just had a different way of tackling the problem.
Rather than threatening to scrap the North American agreement, or even re-open it, Barack Obama tried to address those issues via the TPP.
“TPP, in our view, was the renegotiation of NAFTA,” Froman said.
“That’s why [TPP] included binding and enforceable labour and environmental standards. Why it reformed inter-state dispute settlement … gave us access to to dairy and poultry for the first time in Canada, and energy in Mexico [and] dealt with new issues like the digital economy and state-owned enterprises.”
Still confused where you are going with this, Sherry.
Literally taken directly from the article:
A former U.S. trade representative says the Obama administration viewed the Trans-Pacific Partnership (TPP) trade agreement as a sort of “renegotiation of NAFTA.”
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Well, let's try this one from Canada.
https://globalnews.ca/news/3377323/tpp-was-obamas-renegotiation-of-nafta-former-trade-envoy/
Except that still is saying the opposite of what you're saying.
You are saying that Obama "renegotiated" NAFTA (and is therefore to blame for its failings) and that TPP was terrible (and its a good thing Trump killed it). The article is saying that Obama was going to use the TPP to essentially replace NAFTA and would have fixed its failings in that way, and that now that Trump killed it he's having to scramble to try to fix its failings directly. Both articles you've cited have literally said the opposite of what you've claimed.
Really not sure what you're reading, Sherry.
Directly from the article:
“TPP, in our view, was the renegotiation of NAFTA,”
Way to look for a keyword and miss the point.
Michael Froman explained to The West Block‘s Vassy Kapelos that like President Donald Trump, the former administration recognized there were issues within NAFTA. It just had a different way of tackling the problem.
Rather than threatening to scrap the North American agreement, or even re-open it, Barack Obama tried to address those issues via the TPP.
“TPP, in our view, was the renegotiation of NAFTA,” Froman said.
“That’s why [TPP] included binding and enforceable labour and environmental standards. Why it reformed inter-state dispute settlement … gave us access to to dairy and poultry for the first time in Canada, and energy in Mexico [and] dealt with new issues like the digital economy and state-owned enterprises.”
Still confused where you are going with this, Sherry.
Literally taken directly from the article:
A former U.S. trade representative says the Obama administration viewed the Trans-Pacific Partnership (TPP) trade agreement as a sort of “renegotiation of NAFTA.”
I'm not "going" anywhere with anything because I'm not trying to sell an agenda. I'm pointing out that the one that you're selling is not supported by the articles you're quoting from. Also note that "a sort of" means that it's literally the opposite of being an actual renegotiation, but that it would have accomplished some of the same goals. You know, like the article explicitly said, Obama recognized that there were problems with NAFTA too and, unlike Trump, actually had a plan to fix them (the TPP).
Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
Don't want to derail this thread, happy to PM about it if you'd like. In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.
NAFTA was signed into law by Bill Clinton in 1994. Obama wasn't even an Illinois state senator yet.
Correct. Obama renegotiated it.
Summary: "NAFTA is a disaster and is Obama's fault."
And then after you get called out for that not being true, you switch over to:
TPP was a renegotiation of NAFTA. Trump killed it. Thank God.
Getting caught copying someone elses statement as your own is embarrassing.
You're kidding right? They're separate trade agreements. One involved just North America and the other involves most of the countries that touch the Pacific Ocean. It's right there in their names.
Not at all. Read up on it. It's absolutely a renegotiation of NAFTA.
How the hell can you "renegotiate" a trade agreement with 10 other countries which weren't in NAFTA in the first place?
It would be more accurate (but still ridiculous) to say it was a renegotiation of the TPSEP, which the US wasn't even part of.
because it's a modification, rather than a complete scrapping of NAFTA
Summary: TPP was a disaster (for unspecified reasons) and was the "NAFTA renegotiation" I was talking about.
Of course, that can't possibly have been what you originally meant, since the TPP was never implemented so NAFTA's current problem's couldn't possibly be Obama's fault.
And now you're trying to "win" by just getting super focused on the word "renegotiation" and claiming victory if anyone on the internet used it. My point is that all of your points are literally the opposite of the point of the articles you're claiming as support.
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I'm trying to understand how we got here in the thread. Near as I can tell dustinst22 linked NAFTA to Obama, then somehow the TPP became equated with NAFTA. Ignoring that whole argument for a moment, is the underlying assertion that the threat of these trade tariffs better from a policy standpoint than the TPP becasue it might lead to trade agreement with China that is more favorable to the US?
If so, I'm still very confused because China was never in the TPP to begin with. If not... what are we talking about and how does it relate to these tariff threats?
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Summary: TPP was a disaster (for unspecified reasons) and was the "NAFTA renegotiation" I was talking about.
Agreed, TPP was an absolute disaster, and it's a good thing we avoided it, for many reasons.
This article explicitly states it was a renegotiation of NAFTA, Sherry. "Literally".
Back to the thread, since it's been derailed.
Not a single tariff has been enacted yet, this is just “art of the deal” negotiations about Obamas disastrous Trade agreement, and rectifying THEIR unfair and illegal trade activities. Long term it is sorely needed and LONG overdue.
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Summary: TPP was a disaster (for unspecified reasons) and was the "NAFTA renegotiation" I was talking about.
Agreed, TPP was an absolute disaster, and it's a good thing we avoided it, for many reasons.
You are agreeing with yourself, not with Sherr. Sherr was simply summarizing your argument. Please don't quote out of context in an effort to make it seem like others are agreeing with you.
Not a single tariff has been enacted yet, this is just “art of the deal” negotiations about Obamas disastrous Trade agreement, and rectifying THEIR unfair and illegal trade activities. Long term it is sorely needed and LONG overdue.
This makes zero sense to me, so please connect the dots to me. How does the Obama administration's formulation of the TPP relate to trade with CHINA - which wasn't in the TPP.
You seem to be conflate NAFTA, the TPP, and China when the former two have seemingly little to do with the current rhetoric.
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Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
Don't want to derail this thread, happy to PM about it if you'd like. In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.
This post right here shows the cluelessness he started with, saying that Obama didn't do anything other than a "disastrous" trade agreement and then pointing directly to NAFTA as it has existed for the past 24 years when asked for clarification (his assessment of NAFTA anyway), not to some possible "renegotiation" of NAFTA via TPP (which involved several other countries and had different objectives and which never actually came into effect). The rest of it is just him making it up as he goes along via Google search.
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The disastrous TPP Was signed Feb 4th 2016. In January of 2017 (just after taking office) Trump withdrew from TPP. Had Trump NOT been elected it would have been ratified by Clinton. THEREFORE it is Obama’s disaster.
Obama LET China steal our patents, steal our copyrights, steal our technology, and steal our jobs.
Watch Obama defend HIS deal and MOCK Trumps saying “ I’m going to negotiate a better deal” in June of 2016 DURING the campaign!!!!:
https://www.youtube.com/watch?v=6-EWG6gYlhQ
Trump is solving the problems Obama turned a blind eye to, then exacerbated.
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
In case you haven't been paying attention, China has been doing this for a long time. Obama turned a blind eye to it, Trump is finally doing something about it.
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The disastrous TPP Was signed Feb 4th 2016. In January of 2017 (just after taking office) Trump withdrew from TPP. Had Trump NOT been elected it would have been ratified by Clinton. THEREFORE it is Obama’s disaster.
The TPP would have to have been ratified by Congress before any president could sign it and before it "enters into force." That's true for all countries that were party to the agreement (replace Congress with Parliament or whatever). The signing you reference was only ceremonial.
And you weren't referring to TPP at the outset, but NAFTA, anyway. Keep googling! Maybe you'll learn the TPP as it was constructed was anything but a disaster for the US, especially if the goal is to grow exports while pressuring China to engage more fairly.
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
Because facts are of little import these days.
Ironically, TPP would have been a revolutionary step forward in establishing rules for digital trade, data flows, and IP in the Asia-Pacific. Current rules were established before the internet.
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
In case you haven't been paying attention, China has been doing this for a long time. Obama turned a blind eye to it, Trump is finally doing something about it.
Perhaps I was too vague earlier - I'll condense my question: What does the TPP have to do with China?
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
Because facts are of little import these days.
Ironically, TPP would have been a revolutionary step forward in establishing rules for digital trade, data flows, and IP in the Asia-Pacific. Current rules were established before the internet.
That's not irony, sorry pet peeve of mine when irony isn't used right. There are many many problems with the TPP.
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
Because facts are of little import these days.
Ironically, TPP would have been a revolutionary step forward in establishing rules for digital trade, data flows, and IP in the Asia-Pacific. Current rules were established before the internet.
That's not irony, sorry pet peeve of mine when irony isn't used right. There are many many problems with the TPP.
It does fit the definition of irony; when an outcome is the opposite of the intended or predicted outcome. In this case you are rightfully pointing out that China has demanded intellectual property in exchange for foreign countries being permitted to do business there. One of the provisions of the TPP was stricter controls on intellectual property for other countries in SE Asia, rules that are still largely absent.
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
Because facts are of little import these days.
Ironically, TPP would have been a revolutionary step forward in establishing rules for digital trade, data flows, and IP in the Asia-Pacific. Current rules were established before the internet.
That's not irony, sorry pet peeve of mine when irony isn't used right. There are many many problems with the TPP.
It does fit the definition of irony; when an outcome is the opposite of the intended or predicted outcome. In this case you are rightfully pointing out that China has demanded intellectual property in exchange for foreign countries being permitted to do business there. One of the provisions of the TPP was stricter controls on intellectual property for other countries in SE Asia, rules that are still largely absent.
In that case it would be the intended consequence of the TPP, that's not irony or even close to it.
The correct term here would have been interestingly, or coincidentally.
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How is a trade deal which was never ratified with a group of countries that doesn't include china letting "china steal our patents, steal our copyrights, steal our technology, and steal our jobs."?
Because facts are of little import these days.
Ironically, TPP would have been a revolutionary step forward in establishing rules for digital trade, data flows, and IP in the Asia-Pacific. Current rules were established before the internet.
That's not irony, sorry pet peeve of mine when irony isn't used right. There are many many problems with the TPP.
Nope, I think it's textbook irony: TPP would have gone a long way towards curbing IP theft in Asia, thereby growing a coalition of countries that play by our rules, thereby pressuring China, the same thing you are railing against Obama for not doing. Oh, the irony.
I'm sure there are some anti-free trade (or maybe anti-Obama but otherwise free trade) pundits out there that criticize the TPP and can nitpick "problems." Doesn't mean it wasn't a positive for the US, including a good portion of Trump's rural base.
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Yeah that's not irony.
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Yeah that's not irony.
(https://media.giphy.com/media/a3zqvrH40Cdhu/giphy.gif)
^And that's not sarcasm.
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(https://imageshack.com/a/img924/8803/Twa7Dt.jpg)
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so back to the TPP and China....
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Would just like to point out how much of a disaster the TPP would have been to Australia had it been enacted in one of the original forms.
You guys keep wanting to fuck us over on pharmaceuticals and when our government wants to enforce health policy for the public benefit (Hello Philip Morris!!!) your multi-nationals would have taken legal action for "deprivation of profits"* against our government using ISDS provisions in secret courts and tribunals.
I really don't understand your outrage that the TPP would have been "disastrous" for America. You guys would have won big time. I am all for free trade. Proper free trade. But companies can't go around suing governments just because they don't like laws that stop them from killing people or destroying the environment. I am glad the new TPP somewhat sorta addresses it, but given everything was done hush hush in secret with no public review you have to question whether there's some nasty crap in there. Trump's deplorables are onto something, but they don't realise they would have been the winners out of it.
* This actually happened. Philip Morris sued the Australian Government in the jurisdiction of Hong Kong for loss of profits over plain packaging of cigarettes. They lost (thank Christ).
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I'd love it if someone could explain to me in plain English why the TPP was bad for the USA. Perhaps Dustinst22 can do this?
What provisions would hurt US companies?
How would the USA be worse off?
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I'd love it if someone could explain to me in plain English why the TPP was bad for the USA. Perhaps Dustinst22 can do this?
What provisions would hurt US companies?
How would the USA be worse off?
Here's a long-winded comic strip on TPP (from the guy who makes comic strips about economics - aka economix):
http://economixcomix.com/home/tpp/
The Australia vs. Philip Morris thing is even in there.
Also the EFF (who I generally support) really hated the TPP for how it treated IP and copyrights etc.:
https://www.eff.org/issues/tpp
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I'd love it if someone could explain to me in plain English why the TPP was bad for the USA. Perhaps Dustinst22 can do this?
What provisions would hurt US companies?
How would the USA be worse off?
Mainly it would make it easier for companies in the US to move our manufacturing jobs to countries where labor is cheaper. This doesn't impact me at all as my biz isn't in manufacturing, but pretty horrible for middle America. It would impact all of us indirectly.
Also, the copyright/patent provisions were mostly favorable to big corporations (shocker, I know) -- for example, it would have made it harder for companies to create less costly options to the pricey drugs put out by the big corps. That's already a very significant issue here in the US (I know it's not as bad in other countries), and it would have been exacerbated by the TPP.
The entire agreement was made by corporate lobbyists, those who were in the pockets of Obama. Obama was manipulated by big corps to a very large degree.
It also reduced a lot of environmental safeguards that we currently have, and in general would have had a more negative impact on the environment than what we have in place now. I'm a capitalist, but even I see this as bad. It's strange that a liberal president claiming to be concerned about the environment would want these safeguards removed. Now that's irony (insert cheesy animated meme here).
If it's the "Gold Standard" we're all pretty screwed. Guess we need a Platinum Standard.
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For those who oppose tariffs as being big and bad, whats the alternative? Something has to be done. Does everyone just want to sit and admit defeat? Give me a break. And when is there a better time to address this? When the economy is in the shitter and unemployment higher? There really isn't any other time to address this than when the economy is near full employment. Some might say even with a shortage of workers.
And for those that think China has too much of a hand to go up against, remember what keeps Xi up at night. It is not Taiwan, the South China Sea, nukes in North Korea, India, or even the US. Its creating jobs. China needs a massive amount of people employed. They have also taken on an massive amount of debt and masterfully forced companies in the same sectors to provide loans to other less efficient companies to keep the whole thing afloat. Throw in higher housing costs, people migrating from rural areas to the cities, and you have one massive bomb ready to set off. Its one thing to have to pay higher prices for things, as you can opt to just not buy them, but its another to have to hope that others buy your products to keep your system afloat. And if those jobs get lost, and the government can no longer get away with lying on how good its doing, its going to scare a lot of people in the chinese government, who btw, have never experienced any kind of major economic downturn after a rise they have had. That is why they are coming around to allowing for foreign investment in China. Do you really think they want any of us there? Hell no. They are doing it to help bring money into their system, not just to absorb the debt, but to also make up for the massive amounts of money leaving China.
So when they say they do not want a trade war, believe them. Everything they have built and are doing hangs on stability. We're more chaotic and used to the ups and downs.
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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.
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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.
And who is willing to sign up for those?
Lets keep in mind here, if you have more than someone else, why would you give anything up to him? Countries work in self-interest. China isn't going to be a nice guy and just offer to give us a better deal. There will be a fight. There always is.
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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.
And who is willing to sign up for those?
Really? Countries have been making trade deals since international trade was a thing. We've got deals (either bilateral or poly-lateral) with almost every major economy we don't have an active embargo on.
Are you asserting that the US is incapable of establishing these anymore? Or that a tariff war is preferable.
Even if its the latter - what ends a tariff standoff? Generally it's a trade deal.
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I'm surprised how many experts we have on global economics here.
For 10 mustache hairs, name this person.
For 20 hairs, name his plan... the ___ Plan.
For 50 mustache hairs, post his infamous quote.
Yeah, I’m wondering if you mean “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system.“
WINNER!
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Really? Countries have been making trade deals since international trade was a thing. We've got deals (either bilateral or poly-lateral) with almost every major economy we don't have an active embargo on.
Are you asserting that the US is incapable of establishing these anymore? Or that a tariff war is preferable.
Even if its the latter - what ends a tariff standoff? Generally it's a trade deal.
I am saying who is going to sign up for a deal that gives them less in the end? If I am going to give up something, whether by force or choice, its going to have to be by force or by choice from the threat of force. I am not going to do it to be nice.
In the case of China, the US has whored itself out and put itself in this position. Now it wants some back. Why would China just be willing to go along with it? They have been getting a gift of blue prints, shared technology, the training of its citizens, and in turn dumping cheap products in the US. Why would they want to change that? Their entire system works under the assumption that will continue. If they were nice enough to just change it, they would have done it by now.
Any change to the status quo weakens them. They will not give anything up willingly. Nor would you.
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Really? Countries have been making trade deals since international trade was a thing. We've got deals (either bilateral or poly-lateral) with almost every major economy we don't have an active embargo on.
Are you asserting that the US is incapable of establishing these anymore? Or that a tariff war is preferable.
Even if its the latter - what ends a tariff standoff? Generally it's a trade deal.
I am saying who is going to sign up for a deal that gives them less in the end? If I am going to give up something, whether by force or choice, its going to have to be by force or by choice from the threat of force. I am not going to do it to be nice.
In the case of China, the US has whored itself out and put itself in this position. Now it wants some back. Why would China just be willing to go along with it? They have been getting a gift of blue prints, shared technology, the training of its citizens, and in turn dumping cheap products in the US. Why would they want to change that? Their entire system works under the assumption that will continue. If they were nice enough to just change it, they would have done it by now.
Any change to the status quo weakens them. They will not give anything up willingly. Nor would you.
As near as I can figure, your argument is that the US is unable to make a trade deal with China, and a tariff war is the only way to get what we want.
Is that true? If not I don't understand what you mean when you suggest there is no other option other than slapping tariffs on each other.
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Really can't stand his tweeting, but hard to argue with this:
“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”
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As near as I can figure, your argument is that the US is unable to make a trade deal with China, and a tariff war is the only way to get what we want.
Is that true? If not I don't understand what you mean when you suggest there is no other option other than slapping tariffs on each other.
In order to negotiate, you need leverage. Right now China has what we want. We have an open system and they have restrictions. In turn they flood our market with cheap goods and create barriers preventing our products coming in. And if/when they do go in, they go in under a partnership with a Chinese company, in-part owned by the state as just about all are, who collect the blue prints of what is being manufactured, and train Chinese workers to build those products, who go on to work for other Chinese companies who gain that knowledge.
Its extremely unfair. We've gone along with it because a few companies have made a lot of money in that environment, but some have gotten completely screwed. But we would have addressed with sooner, and while I am critical of many of Obama's international policies, his hand was tied behind his back because of the great recession.
We have repeatedly tried to address these things with China who just blows us off. You can't 'negotiate' with someone who doesn't (1) want to negotiate, and (2) be the guy who has more to lose. Which they do.
So the tariffs are pretty small. 50 billion is nothing. They are the opening shots to let China know they we are serious about going down this road. The Chinese also want to play tough, and slap tariffs back on us to let us know they do not want things to change. Which is why they are going after imports that impact POLITICS versus ones that are actually unfair. Will things escalate from here? They might. But believe me, China has far more to lose there than we do. Eventually there will be negotiations, but they will not come willingly.
The threat of being able to knock back everything they have built in recent years while taking a hit ourselves is leverage. Just saying we are willing to go down this road while they have repeatedly said they do not want to is leverage. They do not want anything messing up their employment, One Belt One Road, military build up in the South China Sea, etc etc.
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Kind of a side note, but I wonder why US oil subsidies aren't mentioned as a job killer.
The US spends trillions each decade attempting to secure the Persian Gulf for oil shipments, our taxes on motor fuel have been frozen for many years and have fallen in net inflationary terms, we give away offshore mineral rights (and increasingly onshore on state/federal lands), the government seizes the property of people on pipeline routes, and taxpayers eat the cost of road repairs and expansion from their income taxes rather than from a consumption tax on fuel. The net result is an oil price much cheaper than what the market price would be in a world where these policies were not in place.
As a result of subsidized petroleum, it became economical to burn tens of thousands of gallons of the stuff to send huge freighters across the ocean to exploit the wage differences between countries. Manufacturers in the US went out of business because their own government was spending their own tax dollars to suppress the price of the oil so overseas competitors could economically ship competing products from around the globe at an enormous environmental cost.
Had we let the Middle East alone and taxed oil as a proxy for the cost of building and maintaining all our roads, it would be prohibitively expensive to ship many bulky or low-value-density products all they way from China and a lot more US factories would still be producing those kinds of goods. Also, our national debt would be about half its current amount. Yet, because it would cost $80-100 to fill up one's (much more efficient) car in such a world, this is considered a political impossibility.
So we blame the people we buy our goods from.
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Buffett came up with a seemingly elegant solution years ago. It basically used import credits to ensure balanced trade. You import $1 of American goods you get a credit to export $1 of goods to America. These can be resold so whatever is the highest value will end up buying the credits/completing the transaction. You can Google around for it or I can dig it up if you're really interested. I think it was printed in Forbes or Fortune.
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Really can't stand his tweeting, but hard to argue with this:
“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”
It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !
Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.
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Really can't stand his tweeting, but hard to argue with this:
“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”
It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !
Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.
Check out Geely (Volvo). Also, I believe US cars that are built in China and shipped here (Ford plans to do this, as well as GM/Buick) experience the tariff. You're right, chinese designed vehicles are not imported here (yet). But non-Chinese car companies are still leveraging china for manufacture and then importing here.
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Really can't stand his tweeting, but hard to argue with this:
“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”
It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !
Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.
Check out Geely (Volvo). Also, I believe US cars that are built in China and shipped here (Ford plans to do this, as well as GM/Buick) experience the tariff.
Geely isn't sold in the USA. Volvo's sold in the USA are built in Sweden. Ford/GM/Buick may build in China, but they don't export to the USA and they have no plans to do this. No car company in the world builds in China and exports to the USA.
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Really can't stand his tweeting, but hard to argue with this:
“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade? No, it sounds like STUPID TRADE - going on for years!”
It's easy to argue with that since THE USA DOES NOT IMPORT CARS FROM CHINA! ! ! !
Quality of cars built in China is so bad, they wouldn't sell in the USA, or Western Europe.
Check out Geely (Volvo). Also, I believe US cars that are built in China and shipped here (Ford plans to do this, as well as GM/Buick) experience the tariff.
Geely isn't sold in the USA. Volvo's sold in the USA are built in Sweden. Ford/GM/Buick may build in China, but they don't export to the USA and they have no plans to do this. No car company in the world builds in China and exports to the USA.
Not totally up to speed on this, but found this. Is it not accurate?
"Geely Automobiles Holding Ltd.-owned Volvo Cars started importing S60 sedans from China to the US in 2015"
"General Motors Co. has followed suit with the Buick Envision SUV and Cadillac CT6 plug-in hybrid."
"Ford Motor Co. plans to begin importing Chinese-assembled versions of it Focus model to the U.S. next year. "
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Here's an easy VIN decoder you can use to see where cars are built. If, and only if the VIN begins with an "L", it was built in China.
https://en.wikibooks.org/wiki/Vehicle_Identification_Numbers_(VIN_codes)/World_Manufacturer_Identifier_(WMI)
I'd be very surprised to find a car in the USA with VIN beginning with "L".
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Well here is an article on it. Interesting anyway.
https://www.nytimes.com/2015/01/13/business/international/volvo-to-export-sedan-made-in-china-to-the-us.html
https://www.ft.com/content/8854f672-2565-11e7-8691-d5f7e0cd0a16
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Our last president didn't do anything other than his disastrous Trade agreement.
Care to elaborate on this or is it just a Sean Hannity talking point? Genuinely curious. @dustinst22
Don't want to derail this thread, happy to PM about it if you'd like. In short, NAFTA cost the US a lot of jobs, drove illegal immigration to astronomical numbers, drove our trade deficit through the roof w/Mexico and Canada, and the deal has worked poorly for Mexico as well.
NAFTA cost the US a lot of jobs because factories were built in Mexico instead of the US.
NAFTA drove illegal immigration to records because people in Mexico had to flee all those factory jobs they took from Americans. They came to the US where zero Republican-voting business owners in agriculture, construction/roofing, restauranting, or the hotel industry would ever hire them. But at least they got away from all those factory jobs that ravaged their homeland.
The trade deficit with Mexico rose because the cost of labor is cheaper there, and the trade deficit with Canada rose because the cost of labor is higher there.
NAFTA worked out poorly for Mexico as a result.
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Ford/GM/Buick may build in China, but they don't export to the USA and they have no plans to do this. No car company in the world builds in China and exports to the USA.
https://www.voanews.com/a/ford-to-export-cars-from-china-to-us-by-2019/3907902.html
https://nypost.com/2017/07/02/gm-is-producing-popular-car-in-china-exporting-to-us/
https://www.nytimes.com/2016/01/29/automobiles/we-can-stop-chuckling-now-chinese-made-cars-have-arrived-in-us.html?mtrref=www.google.com&gwh=9E18518218C9158CADECE4D1EC96C3FF&gwt=pay
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Also the EFF (who I generally support) really hated the TPP for how it treated IP and copyrights etc.:
https://www.eff.org/issues/tpp
Yup. I'm all in favor to lowering barriers to trade, but the horrible crazy no good very bad intellectual property provisions are a major silver lining on the deal not going through.
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I'm having fun following this thread. I'm generally opposed to high tariffs, though I can understand why a developing country would use them, as Hamilton argued for when the USA was young.
For another example of how silly, unfair, and generally not effective tariffs can be, check out the Chicken Tax. (http://"https://en.wikipedia.org/wiki/Chicken_tax")
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For those who oppose tariffs as being big and bad, whats the alternative?
I don't believe the argument that tariffs are required but the simple alternative is subsidies. If for instance a farmer can't compete and you have to give him a job pay him a subsidy. If he chooses not to remain in business and just collect the subsidy then go for it.
Economically subsidies do not negatively impact the rest of the economy via increased prices. Politically it's harder to do because it's more obvious what is actually occurring.
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I'm surprised how many experts we have on global economics here.
For 10 mustache hairs, name this person.
For 20 hairs, name his plan... the ___ Plan.
For 50 mustache hairs, post his infamous quote.
Yeah, I’m wondering if you mean “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system.“
WINNER!
If you believe Mellon ever said that.......
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For those who oppose tariffs as being big and bad, whats the alternative?
I don't believe the argument that tariffs are required but the simple alternative is subsidies. If for instance a farmer can't compete and you have to give him a job pay him a subsidy. If he chooses not to remain in business and just collect the subsidy then go for it.
Economically subsidies do not negatively impact the rest of the economy via increased prices. Politically it's harder to do because it's more obvious what is actually occurring.
The negative side comes that 1) the government is blatantly playing favorites with an noncompetitive business and 2) the price of the thing being subsidized becomes too expensive for the government to bear. The Middle East oil producers have struggled with this a lot the last few years as their single-commodity industry lost money and they couldn't afford to just sell oil for pennies to their own people.
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For those who oppose tariffs as being big and bad, whats the alternative?
multilateral trade agreements.
And who is willing to sign up for those?
Lets keep in mind here, if you have more than someone else, why would you give anything up to him? Countries work in self-interest. China isn't going to be a nice guy and just offer to give us a better deal. There will be a fight. There always is.
The bedrock principle of freer international trade, and the global economy writ large is that trade is not a zero sum game. Comparative advantage and all that. It doesn't mean that every individual participant within countries win out, and the terms of trade certainly matter, but it is a theoretically and empirically sound principle. Tariffs, on the other hand, create losers everywhere.
And who's willing to sign up for multilateral agreements? We've been over this! Eleven other countries were willing to sign up to the TPP, a massive multilateral trade agreement, and in fact they decided to go ahead without the US, again pending ratification. This includes countries with higher environmental and labor standards and larger social safety nets than the US, such as New Zealand. And it includes developing countries. They all understand that their pies will all get bigger, because trade is not a zero sum game.
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Alternatively you could just pay the people whose jobs would be lost to foreign competition not to work.
Obama's tariffs on chinese tires cost american consumers $900,000 per job saved. (Source: https://piie.com/publications/policy-briefs/us-tire-tariffs-saving-few-jobs-high-cost)
In an old study from 1986, the vast majority the tariffs cost consumers more each year than it would have cost to just pay each person whose job was saved to not work.
(https://fee.org/media/20587/mfg-1.png)
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I volunteer to accept payment to not work producing any color TVs in lieu of a tariff.
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I volunteer to accept payment to not work producing any color TVs in lieu of a tariff.
Seconded.
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Gotta give credit to Trump where it's due.
"Xi said China would lower tariffs on auto imports, something President Trump recently tweeted about. He also said he would ease restrictions on foreign automakers' ownership of Chinese operations. Xi said he would open up the financial, shipping and aviation industries to more foreign competition. He also said China would beef up property rights as well as oppose monopolies."
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Gotta give credit to Trump where it's due.
Stop it, this is blasphemy here ;)
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Gotta give credit to Trump where it's due.
"Xi said China would lower tariffs on auto imports, something President Trump recently tweeted about. He also said he would ease restrictions on foreign automakers' ownership of Chinese operations. Xi said he would open up the financial, shipping and aviation industries to more foreign competition. He also said China would beef up property rights as well as oppose monopolies."
How is this different from what China has been promising for decades? Xi has made such vague statements in the past only to not follow through. Time will tell whether this is just more of the same. My personal reading here is that he's placating Trump, giving him something to boast about, with little intent to change anything. Xi is playing the long game, knowing he doesn't need to worry about elections and has cash on hand to weather a tariff storm for quite a while.
More important than Xi's rhetoric is China's actions. On that topic, today China carried through officially filing its complaint with the WTO against the US's steel & aluminum tariffs. They did this literally hours after Xi's broad comments about 'opening up trade'.
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Yeah I was just going to post this news. I know a lot of people do not like Trump but he is right for making this an issue. It also goes to show that China is doing what it can to avoid a trade war. China is also taking the US to court over the steel tariffs which is hysterical because it’s just going to show that China is dumping their steel. But these are really just delaying tactics too.
Maizeman: have you read the TTP agreement? Few have. It’s 7,000 pages long. I would be wary of signing a massive agreement like that as well.
And the case study you posted, there is a whole lot more at stake than the items that have been hit with the tarrifs. Why not put up a list of all the barriers within China and the ridiculous laws foreign companies have to folllow in China but Chinese companies do not have to folllow in other countries. Then explain how you would change that when the Chinese had no interest in changing? Their hand needed to be forced, and you are seeing that played out right now. It’s harsh, but you have to break some eggs to make an omelet.
I know this is going to sound a little arrogant, especially to our international visitors, but the world need a strong US president internationally. When there isn’t one, the world gets pretty chaotic. Once the hammer falls peeps seem to fall in order. Obama was pretty weak internationally.
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I don’t want people to think I am a faithful Trump supporter that’s just trashing Obama. I am an independent. I think there are clowns and criminals in both parties.
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...
I know this is going to sound a little arrogant, especially to our international visitors, but the world need a strong US president internationally. When there isn’t one, the world gets pretty chaotic. Once the hammer falls peeps seem to fall in order. Obama was pretty weak internationally.
To be fair, I think Obama's international policies were the weakest portion of his administration, but I'm curious about this assertion that Trump is somehow better. He describes his policy as "America First" and in practice it's involved a lot of pulling back, squabbling with allies and threatening to not participate. Sure, military spending is going up - slightly - but he's pretty much giving China and Russia more power in our absence.
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Maizeman: have you read the TTP agreement? Few have. It’s 7,000 pages long. I would be wary of signing a massive agreement like that as well.
And the case study you posted, there is a whole lot more at stake than the items that have been hit with the tarrifs. Why not put up a list of all the barriers within China and the ridiculous laws foreign companies have to folllow in China but Chinese companies do not have to folllow in other countries. Then explain how you would change that when the Chinese had no interest in changing? Their hand needed to be forced, and you are seeing that played out right now. It’s harsh, but you have to break some eggs to make an omelet.
No I haven't read the entire document. As I said, the IP portions of the TPP were terrible, and yes there was a lot of other bad stuff tucked away in the agreement. I don't know whether on balance it would have done more good than harm or more harm than good.
I am confident that the reason given for killing it ("protecting" americans from more open trade with a lot of the world), is something that definitely would have done us more good than harm in coming years. *shrug*
As for the ridiculous barriers foreign companies have to follow when doing business in China, I'm quite familiar with them. At one point when one of the companies I've involved in was going to open a business in China we were being forced into a legal structure where one of the owners was going to be personally legally liable for any misconduct on the companies part. (Alternatively if we'd created a joint venture with a chinese company none of that would have been an issue.) When we want to repatriate profits out of China, we have to put in a request to wire money that can take weeks to go through and is sometimes rejected for unspecified reasons forcing us to start over. When I or my partners are over there, half the internet is blocked behind the great firewall. When we're in the USA and trying to meet with chinese employees, platforms like skype give patchy and low resolution connections, while using chinese based video clients seem to work perfectly.
However, we wouldn't bother to put up with all this if we weren't still making money in the process. If it ever gets too bad, we'll close down the china business. But I don't think it is the American consumer's responsibility to sacrifice their economic wellbeing to make it easier for me, and people like me, to make more money in China.
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Oops looks like we spoke too soon.
U.S.-China Talks Broke Down Over Trump’s Demands on High-Tech Industries https://www.bloomberg.com/politics/articles/2018-04-10/u-s-china-talks-said-to-have-stalled-over-high-tech-industry
Looks like China was offering other parts of their economy to be open, but to keep doing their shady business practices.
It's the ol' bait 'n switch!
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However, we wouldn't bother to put up with all this if we weren't still making money in the process. If it ever gets too bad, we'll close down the china business. But I don't think it is the American consumer's responsibility to sacrifice their economic wellbeing to make it easier for me, and people like me, to make more money in China.
I would agree if the alternative would be to enforce the same practices on Chinese companies in the US as the US ones are treated there. But as long as things are uneven, I have a huge issue with it.
See below to see how we've been a bunch of suckers for some time now to allow this to go on.
https://www.cfr.org/blog/why-does-everyone-hate-made-china-2025
Equally problematic to Beijing’s goal of “self-sufficiency” and becoming a “manufacturing superpower” is how it plans to achieve it. Chinese officials know that China lags behind in critical hi-tech sectors and hence are pushing a strategy of promoting foreign acquisitions, forced technology transfer agreements, and, in many cases, commercial cyber espionage to gain cutting-edge technologies and know-how.
Just pisses me off no one has had the balls to confront this.
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To be fair, I think Obama's international policies were the weakest portion of his administration, but I'm curious about this assertion that Trump is somehow better. He describes his policy as "America First" and in practice it's involved a lot of pulling back, squabbling with allies and threatening to not participate. Sure, military spending is going up - slightly - but he's pretty much giving China and Russia more power in our absence.
I think Trump's style is one of shock first to get their attention, and then meet somewhere halfway. Everyone thinks he is crazy and that isnt a bad thing. The worst thing you can be is predictable, as that just allows others to plan for your response. But if you keep them off balance, you keep them on your toes, and they spend more time worrying about what you are going to do, and less time to plan for action.
And while the talking heads worry about the US's decreased influence in the world, this would have to assume that everyone suddenly forgets what Russia is like and what China is doing, and they are not. Everyone is suspicious and everyone works in their self-interest. And many of these countries, like the Philippines for example, are really just playing both sides: they want Chinese investment and tourism dollars, and protection by the US. If they go too far one way they lose the other. Its an old Cold War tactic and lots of countries played it between the US and Soviet Union. But Trump is right, there are allies of ours that are holding back on defense spending while spending lavishly on social programs (Germany). Germany can't repair their fighters as they are short on parts, so guess who has to deploy their forces to Poland or the Baltics? The US. And that costs money. Is Poland or the Baltics in our backyard, or theirs?
So many countries have been free riding, and that needs to stop.
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Not a single tariff has been enacted yet, this is just “art of the deal” negotiations about Obamas disastrous Trade agreement, and rectifying THEIR unfair and illegal trade activities. Long term it is sorely needed and LONG overdue.
Gotta give credit to Trump where it's due.
"Xi said China would lower tariffs on auto imports, something President Trump recently tweeted about. He also said he would ease restrictions on foreign automakers' ownership of Chinese operations. Xi said he would open up the financial, shipping and aviation industries to more foreign competition. He also said China would beef up property rights as well as oppose monopolies."
Probably best to wait until the ink is dry before celebrating, yes?
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Probably best to wait until the ink is dry before celebrating, yes?
Agree. Still, getting China to even start talking like this imo is a good sign and shows they are at least not taking a hard stance. We may not get what we want/demand, but getting any kind of change will be at a minimum a small victory. This is more than our last president did wrt China trade by a massive margin. We have someone who knows the art of negotiation.
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Probably best to wait until the ink is dry before celebrating, yes?
Agree. Still, getting China to even start talking like this imo is a good sign and shows they are at least not taking a hard stance. This is more than our last president did wrt China trade by a massive margin. We have someone who knows the art of negotiation.
China talks like this all the time. Under Obama, under W, under Clinton... we can go back to Nixon if you want. I don't see a different response here than what we've gotten from China before.
Meanwhile they are going ahead with the WTO.
As for the negotiation - it's unclear what the US is actually asking for - the WH has said it will outline a list of demands but it hasn't yet done so. He mentioned intellectual property but then focuses mostly on the trade deficit. Some argue that this 'chaos' is actually a strategy, others would say its just chaos derived from a lack of focus and constantly changing economic advisors.
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In my experience, the culture in China really frowns on saying no directly. So the version of no you get is "let's talk more about it" and you can keep talking for weeks or months but be no closer to a yes.
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In my experience, the culture in China really frowns on saying no directly. So the version of no you get is "let's talk more about it" and you can keep talking for weeks or months but be no closer to a yes.
Well their first response was a hard line "okay we'll add tariffs to 100 B of US goods". To see them completely remove that off the table and start talking negotiation is revealing. China has more to lose and they know it. They've had it good for a LONG time and don't want to lose what they have (basically stealing our IP and previous presidents allowing it).
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Their first response was $50B in tariffs on US goods. The $100B in tariffs was what our president counted with on Chinese goods.
At this point I think the best thing is to wait and see what happens. After that either you or I can resurrect this thread to tell the other "I told you so."
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Kind of a side note, but I wonder why US oil subsidies aren't mentioned as a job killer.
The US spends trillions each decade attempting to secure the Persian Gulf for oil shipments, our taxes on motor fuel have been frozen for many years and have fallen in net inflationary terms, we give away offshore mineral rights (and increasingly onshore on state/federal lands), the government seizes the property of people on pipeline routes, and taxpayers eat the cost of road repairs and expansion from their income taxes rather than from a consumption tax on fuel. The net result is an oil price much cheaper than what the market price would be in a world where these policies were not in place.
As a result of subsidized petroleum, it became economical to burn tens of thousands of gallons of the stuff to send huge freighters across the ocean to exploit the wage differences between countries. Manufacturers in the US went out of business because their own government was spending their own tax dollars to suppress the price of the oil so overseas competitors could economically ship competing products from around the globe at an enormous environmental cost.
Had we let the Middle East alone and taxed oil as a proxy for the cost of building and maintaining all our roads, it would be prohibitively expensive to ship many bulky or low-value-density products all they way from China and a lot more US factories would still be producing those kinds of goods. Also, our national debt would be about half its current amount. Yet, because it would cost $80-100 to fill up one's (much more efficient) car in such a world, this is considered a political impossibility.
So we blame the people we buy our goods from.
That was an interesting side note to read. It does make you wonder about a lot of big ag, big pharma, big oil, etc. type of policies. Many externalities in all directions.
With the price of oil/gas in the U.S., I wonder if the amount of subsidization was lower, like if there was $5 gas instead of whatever European prices are. I bet U.S. domestic infrastructure and society in general would be a lot more mustachian.
Also unless I missed it, 3 pages on a tariff thread and no direct mention of deadweight loss yet?! :-)
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/\ That's because people don't think of tariffs as a sales tax. Change the phrasing and a lot more people would be against it. Yet it is the exact same thing from a consumer's point of view.
The main difference is the subsidy of less efficient producers.
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Thinking of a tariff as a sales tax implies that the tariffs would be applied to all items evenly...which would defeat the point of the tariff.
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Thinking of a tariff as a sales tax implies that the tariffs would be applied to all items evenly...which would defeat the point of the tariff.
A tariff on all imports uniformly is essentially a border adjustment tax: https://en.wikipedia.org/wiki/Border-adjustment_tax
Which is how Trump/Paul Ryan were originally said they were going to fund the tax cuts, instead of just more deficit spending like what was finally implemented.
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Thinking of a tariff as a sales tax implies that the tariffs would be applied to all items evenly...which would defeat the point of the tariff.
A tariff on all imports uniformly is essentially a border adjustment tax: https://en.wikipedia.org/wiki/Border-adjustment_tax
This may be true, but is not at all what is actually happening:
At a legislative hearing today in Washington, the top US trade official, Robert Lighthizer, told US senators that Argentina, Australia, Brazil, South Korea, and the EU would be exempted from the 25% tariff on steel and the 10% duty on aluminum. Including Mexico and Canada, which were exempted from the start, a majority of the US foreign supply of foreign steel, iron, and aluminum now comes from the exempted group.
https://qz.com/1235803/trumps-steel-and-aluminum-tariffs-which-countries-are-exempt/
We are only taxing the bad guys, so that we remove the economic incentive for tightwads like us to buy their cheap products.
If you have a better suggestion as to how we can compete with countries that have state-owned industries (no profit motive) or use child labor or blatantly steal other's IP I would love to hear it!
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Oh no, I wasn't trying to imply that we actually were getting a border adjustment tax. Just that there is a specific term for a tariff applied to all goods, and there is a reason a country would use one sometimes.
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I guess all the rich software people who can retire early won't be affected by tariffs and I suppose the CPA / MBA / money gurus.
Last Summer, I visited electrical facilities adjacent to old plants in Northern Ohio. These plants were steel plants and automotive plants. Without the good jobs, the neighborhoods adjacent to these facilities were starting to run down. Economists teach us this is a good thing. They tell us to do the things we as a country are good at and let other countries do what they are good at and we will both be better off. I used to believe that balderdash.
Now I believe in people. I have this hunch that other countries may be better at keeping their facilities running even at a bit of a loss to keep people working. It seems that some subsidy, whether approved by treaties or not, is cheaper than the pain and anguish of losing good jobs. If we make it here and sell it here, the money stays here.
If we have another conventional war, we will need manufacturing.
If we keep doing stuff, we will learn new technologies. If we let it go, it's gone folks and we will be further behind. The future is now.
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I volunteer to accept payment to not work producing any color TVs in lieu of a tariff.
Seconded.
Apparently you can get paid a lot of money for not having sex with someone.*
*Offer only valid if you have had sex with the president. Sorry, back to tariffs.
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I guess all the rich software people who can retire early won't be affected by tariffs and I suppose the CPA / MBA / money gurus.
Last Summer, I visited electrical facilities adjacent to old plants in Northern Ohio. These plants were steel plants and automotive plants. Without the good jobs, the neighborhoods adjacent to these facilities were starting to run down. Economists teach us this is a good thing. They tell us to do the things we as a country are good at and let other countries do what they are good at and we will both be better off. I used to believe that balderdash.
Now I believe in people. I have this hunch that other countries may be better at keeping their facilities running even at a bit of a loss to keep people working. It seems that some subsidy, whether approved by treaties or not, is cheaper than the pain and anguish of losing good jobs. If we make it here and sell it here, the money stays here.
If we have another conventional war, we will need manufacturing.
If we keep doing stuff, we will learn new technologies. If we let it go, it's gone folks and we will be further behind. The future is now.
Do you have an upper limit to this belief? You're advocating that an industry that isn't competitive should be propped up by the taxpayer. To what end? How much of a loss are they allowed to run each year to stick to the rest of the country before the plug gets pulled? Is this for any industry or business? If not, how do you pick the lucky ones?
We have more tanks parked in depots than we have on active duty. We've been building new vehicles and weapons to supply a war that has been going on steady for 16 years. The days of putting raw steel in one end of the factory and spitting a tank or airplane out the other end in a day are over. Our ships take years to build. Our tanks and aircraft take months. Whatever war we get into in the future that is so large we might run out of equipment has to be fought with whatever we have on hand pretty much on day 1. So what manufacturing are we missing that would change this dynamic?
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Part of the explanation for that closed plant is that we have been living in a world of easy lending for decades. Starting in the 1980's, it became the higher-ROE option to leverage a business to the hilt, make debt-funded acquisitions, and direct the earnings to a smaller set of shares. If the business goes bankrupt as a result, the bondholders eat most of the cost. But the bondholders don't even notice because they are in ETFs and similar funds, and/or have come to expect this behavior. Similarly, stockholders are so diversified they are not too concerned about any particular company's risky leverage.
Do a lookup of junk bonds and you'll find lots of companies that increased and increased their leverage over the years until their debt to equity reached 5-7x, at which point it becomes prohibitively expensive to raise more cash through either debt or equity offerings. The result is a zombie company that sheds assets and employees, like your local factory, just to make interest payments. Any competitor that is acquiring assets with earnings, conducting R&D, or investing in marketing or quality will eventually outmaneuver an indebted competitor who is more focused on making one more quarter of interest (or dividend) payments. When you have an entire economy full of zombie companies, other economies will naturally become the more efficient, more innovative producers. In walks China.
I bet if the US limited the tax deductability of interest expenses to, say, 80% of the interest expense, the whole incentive structure would be transformed. However this could never happen due to entrenched interests. I'd also like to see management have more skin in the game in terms of bond ownership, which would disincentivize the short-term stock boosterism that leads to long slow declines.
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Do a lookup of junk bonds and you'll find lots of companies that increased and increased their leverage over the years until their debt to equity reached 5-7x, at which point it becomes prohibitively expensive to raise more cash through either debt or equity offerings. The result is a zombie company that sheds assets and employees, like your local factory, just to make interest payments. Any competitor that is acquiring assets with earnings, conducting R&D, or investing in marketing or quality will eventually outmaneuver an indebted competitor who is more focused on making one more quarter of interest (or dividend) payments.
cough::Toys R Us::cough
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This NYT article illustrates a few of the real-world complications and unintended consequences that inevitably flow from tariffs:
https://nytimes.com/2018/04/10/business/economy/tariffs-steel.html
Edit: whoops, apparently you can't link to msn articles. Replaced with the direct link.
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WSJ: Trump Tells Advisors to Study Rejoining TPP
He's been reading my forum posts! TPP gonna be yuuuuge!
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Read this too, but it looks like it would be a revised version if anything.
The new gold standard? lol
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Read this too, but it looks like it would be a revised version if anything.
The new gold standard? lol
Is this irony yet?
Yes, it will now be called the GOLD STANDARD TRUMP PACIFIC PARTNERSHIP in yuuuuge gold letters :)
https://www.theguardian.com/world/2016/nov/20/trump-pacific-partnership-new-zealand-pms-idea-to-save-tpp
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I love watching these threads weeks later when the market is up. What are people going to do as unemployment is at its lowest point since 1969 and the economy is booming? Invest in bonds as the fed is talking about raising interest rates? Hell no!
China may talk tough but they want nothing to do with a trade war.